New Mexico’s Public Education Department is investigating a contract signed by a former lawyer for the agency, whose connection to the business that landed the $150,000 award has come under scrutiny.

Hilary Noskin, who served as the department’s general counsel during portions of 2012 and 2013, was one of five higher-level agency employees who signed to certify a state-administered contract with a company, AfterMath Education Inc., to provide after-school programs in New Mexico schools, according to a story in the Sante Fe Reporter. But Noskin is also the founder and majority shareholder of that company—which means that she approved the “legal sufficiency” of a state contract with her own business, according to the story.

A spokesman for the state department of education, Larry Behrens, said in a statement to Education Week that it is routine for the general counsel of the agency to sign off on contracts, and that Noskin did not participate in the selection process for the contract. He also noted that Noskin was required to put her share in the business in a blind trust before joining the agency.

Even so, Behrens said department officials believe Noskin should have abstained from signing the contract. State officials are “carefully reviewing” the award, and payments of the contract have been halted until that review is complete, Behrens said.

The Reporter noted that the contract is administered by the New Mexico education department, but supported through the 21st Century Community Learning Centers, a federal program. Behrens said the agency is working with federal officials in conducting its review of the award.

Noskin told the publication that that her company is waiting for reimbursement of services it made for the contract, adding that signing the deal as the department’s general counsel was an “innocent mistake.” The publication reported that Noskin now works as a regional compliance manager at Walmart.

“I can unequivocally state that this was an inadvertent error,” Noskin wrote in a letter to state officials. “In fact, my behavior before, during and after regarding AfterMath Education was transparent and I made every effort to ensure that there was no conflict of interest.”

In her letter, Noskin said she has never been an employee of AfterMath, despite founding the company, and has never been compensated for her work there. The Reporter story says she disclosed her role with AfterMath to various state officials, including the department’s secretary-designate, Hanna Skandera, before moving into state work. The publication also says that Noskin’s financial disclosure statement to the secretary of state’s office does not list her connection to the company. Noskin said she didn’t have to disclose that information on the statement because she had only collected “small, incremental payments” from AfterMath to pay back a 2010 loan she made to jump-start the company.

Regular Marketplace K-12 readers know that the AfterMath award isn’t the only New Mexico education contract to have generated controversy recently. New Mexico officials, acting on behalf of a consortium of states designing online tests aligned to the Common Core State Standards, recently made a major award to the global education company Pearson. But that award was protested by a rival testing organization, the American Institutes for Research, which claimed the bidding process was skewed toward Pearson. Then last week, a New Mexico state court judge halted the contract from going forward, until AIR protest can be heard by the state procurement agency.

Sean Cavanagh is Senior Editor of EdWeek Market Brief. He is also a reporter and editor for Education Week, where he has covered a variety of beats since 2002. His primary focus is on business and technology issues in K-12 education. Previously he covered math and science education, charter schools and school choice, and federal policy. Before joining Education Week, he was a reporter for daily newspapers in Tennessee and Florida.